Western Digital Corporation has agreed to buy component maker Komag Incorporated for about $1 billion in cash. Western Digital would pay $32.25 a share for all of the outstanding shares of Komag, a supplier of the thin-film media that finished products maker Western uses to make disk drives. The transaction, which is expected to close in the third quarter, has been unanimously approved by both boards and is subject to regulatory approvals. Western Digital plans to fund the transaction, including the likely retirement of Komag's convertible debt due in 2014, through cash from the combined company and a senior secured term loan of up to $1.25 billion. Komag warned that revenue for the second quarter will be down at least 30% from the first quarter.
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